Will GST Really help India?
GST or Goods and Services Tax is a taxing structure that has been created to ensure a uniform implementation of taxes across the country. It was created to make sure that there is fair competition in the country. The goal was to make sure that the Indian Economy could flourish under this reform.
GST was implemented keeping in mind the short term as well as the long term impacts it would have on the country. India is a developing country that provides opportunities to grow to various people across various sectors and fields.
GST’S Impact On The Country
GST has several benefits on the Indian Economy. They are as follows:
The tax base of the country has increased due to GST. This is extremely beneficial for the government as they now have a larger tax base. They can utilize the funds as per the GST invoice for better developmental projects in the country. This will lead to immense progress in the country. This provides for a long term impact in the country.
Tax barriers such as tolls and check-posts lead to an immense waste of time and money. This will be removed. All these are just hurdles that needed to be done away with. Thankfully with the introduction of GST, these are all now removed.
The tax burden on the taxpayer has been reduced to a great extent. GST provides tax credit and the current structure does not burn a large hole in the pockets of the producers. It encourages the taxpayer to produce more and does more. The fear of various taxes at every step of production is been done away with.
Custom duties are removed. GST will ensure that India’s participation in global markets is there and is relevant. India’s participation will increase because of this step. The cost of the transaction will go down and the increased participation will add to the nation’s economic growth. The GST invoice will show a surplus for the nation.
Unnecessary taxes like VAT, service tax and excise have been done away. These were all different indirect taxes that were charged to the taxpayer and burnt a hole in the pocket. The GST invoice is a much simpler and better method of dealing with tax implementation in the country.
One of the good things about the implementation of GST is the controlled circulation of black money. Businessmen are now kept in check. They cannot be a part of any illegal activity. At least not under the radar of the government. The GST invoice will make sure of that. This is beneficial as it gives rise to a smooth flow of money in the economy without any unfair trade practices.
There is an increased demand for goods and services with the implementation of GST. The demand and supply flow has been affected by the market. This leads to a proper consumption of goods and services by the customers and the timely payment of taxes on the products.
Increased demand has also led to an increased supply of goods and services. This leads to a rise in the production of goods by the producers.
The common man will feel less impact on himself. Less money will go out of the pocket. Goods that could not be consumed earlier due to the high price can now be consumed at a reasonable rate. Also, taxes will not be implemented on every service and the common man will be able to save much more than he was saving before GST was introduced.
The earlier taxing regime saw more spending and less saving. The change is already beings seen and will be seen better in a couple more years.
The cost of manufacturing will go down. This will make sure that the burden does not fall heavily on the taxes. This in return will lower the prices of the consumer goods. Consumers will be able to purchase more at a reasonable rate and it will not exhaust their funds too.
The cascading effect that was seen in the earlier regime will no longer be seen now. There is a better implementation of taxes on goods and services as seen through the GST invoice.
Short- term Impact
The consumers and the taxpayers will have to pay a higher tax than before. This is mainly because the tax is not divided into various smaller parts. There is just one indirect tax and one invoice known as the GST invoice for it. It is the compilation of all taxes. Therefore, the burden will be to be felt for a while. The cost of compliance which is attached will be felt.
However, this impact will fade away. The benefits of GST will be seen over the years when the nation starts booming.
GST has shown positive effects ever since its implementation. However, the effects and the positive impact of the same will be seen in a clearer light in the upcoming years.